What percentage of your net income do you put aside every month?

[Feruk]

Originally posted by HiTempguy1
Either way, as I mentioned, with the way our pension works, I am putting away 24% before tax dollars and it shows an extremely comfortable retirement ($70k/year at 55). I don't really have a good way to translate that into "after tax". I suppose I could take the amounts paid and "tax" them? Then compare to my actual take home on two pay stubs. Of course, I also get paid biweekly, so two paystubs is less than somebody else's two 15 day pay periods.

I'm not sure it's wise to put all your eggs in one basket, especially if that basket is something very expensive for the government like a DB pension plan. What makes you so sure this plan will still be solvent when you retire? Or that you'll get anywhere near the benefits that you were promised? We're now living in a country that loves to spend, and our province is no better. If you don't believe that "could happen", all you gotta do is look at countries like Greece that had a spending problem. DB pensions there are reduced in payout and retirement age has been pushed back (which is just a pension reduction phrased differently).

[suntan]

Originally posted by Feruk

I'm not sure it's wise to put all your eggs in one basket, especially if that basket is something very expensive for the government like a DB pension plan. What makes you so sure this plan will still be solvent when you retire? Or that you'll get anywhere near the benefits that you were promised? We're now living in a country that loves to spend, and our province is no better. If you don't believe that "could happen", all you gotta do is look at countries like Greece that had a spending problem. DB pensions there are reduced in payout and retirement age has been pushed back (which is just a pension reduction phrased differently).

DB pensions are basically ironclad. There are laws that specifically protect their assets. Companies even have to make up shortfalls.

My wife started into her DB pension two years ago, even after just one year she's guaranteed $300/month when she retires if she's let go now.

[ZenOps]

Beyond just assumes that we are all white males aged 35 to 65.

Most 65 and older do not save, they spend. If I ever hit 70+, there is no way in hell I'm planning on saving more than a half a percent a year. If I could get away with it, I'd plan on owing 10 million or so by the time I'm 80 (assuming that I would make it to that age, also assuming that 10 million will be a not so outlandish amount by then)

Black people in the US know this best... Sometimes you gotta pay bail to be able to work so that you can pay the rent. Doesn't matter if you are innocent or not.

[Xtrema]

Originally posted by suntan
DB pensions are basically ironclad. There are laws that specifically protect their assets. Companies even have to make up shortfalls.

My wife started into her DB pension two years ago, even after just one year she's guaranteed $300/month when she retires if she's let go now.

Never say never.

http://business.financialpost.com/pe...nt-a-guarantee

But I recall your wife works for Shell, one of the best funded and well run pension operator out there. Just make sure you stay employed past 20 years when you hit 55 to collect tho.

Many didn't.

[suntan]

Originally posted by Xtrema


Never say never.

http://business.financialpost.com/pe...nt-a-guarantee

But I recall your wife works for Shell, one of the best funded and well run pension operator out there. Just make sure you stay employed past 20 years when you hit 55 to collect tho.

Many didn't.

Of course there is "the chance", but that requires collapse, not management directive (in other words, a deliberate decision on part of the management to suck the funds out of the pension).

And zero chance the Alberta gov't reneges on DB pensions.

[suntan]

I do wonder, for those of you contributing to your company pension and substantially to your RRSPs, how? The pension adjustment take away almost all RRSP room.

[HiTempguy1]

Originally posted by Feruk

I'm not sure it's wise to put all your eggs in one basket, especially if that basket is something very expensive for the government like a DB pension plan. What makes you so sure this plan will still be solvent when you retire? Or that you'll get anywhere near the benefits that you were promised? We're now living in a country that loves to spend, and our province is no better. If you don't believe that "could happen", all you gotta do is look at countries like Greece that had a spending problem. DB pensions there are reduced in payout and retirement age has been pushed back (which is just a pension reduction phrased differently).

I completely agree. I have a comprehensive retirement plan, but it will take time to implement. Unfortunately, because the DB pension must be contributed to, it takes precedence (which is something that a lot of people don't recognize, the risk gov employees take having a pension that can be changed on a whim by those who make the law). I'm not going to send myself to the poor house on whatifs and unlikely chances on a pension plan somehow getting pulled or drastically modified But I certainly have planned for and are working towards having other savings.

Quite honestly, I'd quit my job if changes were announced to the pension (or if the pension was in a downward spiral, we get quarterly updates) so I could pull the money out that is currently invested and be able to have better control over that sizeable amount of money. Yes, I've looked into LIRA's and how cashing out of a pension works (due to how young I am, I'd actually get a substantial cheque cut that would instantly go into RRSP's).

I think I have it under control. I wouldn't say it is the BEST plan someone could have in place, but as someone with very few responsibilities, at this time, I'm willing to roll with it Having seen multiple people affected by poor choices when it comes to retirement funds (in regards to pensions), I keep very close track of anything to do with it. One whiff of changes, and I am gone. I told my boss that I'd be out the door in 2014 if the conservative changes went through, as I'd be throwing money into a pit I'd never get money back from, and they didn't pay me enough to justify having significant rrsp contributions.

Suntan, the problem is, as a corporation, if your pension starts to go south, its best to just ride the company into the ground and short change the pensioners (can't get blood from a rock) then to actually try and fix it. (edit- I see you posted the exact same thing)

And while changing gov pensions IS difficult, it is possible. The conservatives tried about 3 years ago (2013/2014) to change the pension, citing it was costing them too much money (they at best do the same matching someone in O&G would get in RRSPs) and that it was an unfunded liability (the PSPP has plan actuaries which manage the plan and operate for the members, not like investment advisors at banks trying to steer people to whatever gets them high commission and fees). The pension is currently underfunded, but employees contributions were increased and the pension will be fully funded as of ~2022. In 2014, it was only at 85%, but now it already is at 89%.

Part of the reason for this was government meddling in not allowing the pension to raise employee contribution rates, which also was what the conservatives were trying to enshrine (capping contribution rates) in the 2013/2014 period, which basically would have turned the pension into a death spiral.

Pluses and minuses to everything. There is risk, but it is relatively low, especially when compared to having your own investments in the stock market.

[Xtrema]

Originally posted by suntan
I do wonder, for those of you contributing to your company pension and substantially to your RRSPs, how? The pension adjustment take away almost all RRSP room.

I don't think it's possible unless one has saved up RRSP allowance to be used later in the career.

If you are a lifer at one employer with decent pension plan, it's almost impossible to put into RRSP.

And I prefer RRSP which I have more control over than some employer plans especially ones that lock you money away in LIRA.

[zhao]

Originally posted by J-hop


I don't see it as frugal because by my definition of frugal (and I think most of the world outside of beyond) it isn't. Buying lunch every day is not frugal. Going on out of country vacations every year is not frugal no matter the deal you got. Financing a 335 is not frugal. Owning 7 cars is not frugal.

It's not about "moving money around" it's about what is exiting your bank account at the end of the day. Don't know where you got the "moving money around" bit.

I just find people don't really understand what living frugally actually entails.

And maybe at the end of the day living frugally is not his goal, that is completely fine. But from his post he seemed to be suggesting it was. Making each dollar get you as much as possible isn't really being frugal if it's not a necessity. Being strategic about your vacation purchases is just common sense, it's not being frugal.

Yes, I wouldn't classify my lifestyle as frugal per say. I would classify it more as efficient. It's not really about saving money, it's more about not 'wasting' it. Money technically exists solely to be spent, so just hording every penny is pretty pointless.

Originally posted by HiTempguy1

Also, I've spent WAY more on racing than you, pussy :p

Lol ya but you're a rally guy so your budget requirements are astronomical compared to mine. wtf are you guys trying to do? Compete with drag racers for how much amateur racing costs? lol. I only averaged about 20g a year for 5 years straight, and now that I've figured out how to budget economically for racing i think a season for me could be done under 10g.

[Boat]

10% automatic from my pay check directly into rrsp currently but I should have already gone up to 18-20 at the start of this year. Soon!

Forgot to add.. my work adds about 5% to my rrsp and another 7 to the defined contribution plan.

[Prail]

Originally posted by suntan
DB pensions are basically ironclad. There are laws that specifically protect their assets. Companies even have to make up shortfalls.

My wife started into her DB pension two years ago, even after just one year she's guaranteed $300/month when she retires if she's let go now.

Another point to this - I remember the conservatives just before getting punted were making a lot of noise about making changes to the 'unsustainable' pensions. They turned out to be funded just fine.

The problem is most conservatives I know are fairly uneducated about how these things work and just assume it's free money to lazy government workers. Many don't realise just how much money is funnelled into it as a payroll deduction... it's very sizeable.

So while I'm sure it will exist in some form - I'm just waiting for another conservative government to take a swing at them.

[ZenOps]

Rock stars know how to do it, you finance based on how long you expect to live.

If you intend to burn hot and die at 35 or 45, you pretty much should be borrowing as much money as possible, tens or hundreds of millions from the suckers out there - because you can't take it with you, but they also can't do any damage to you six feet under.

This is doubly true for white people, because they are unlike other races where people actually break thumbs if you don't pay back money. I mean shit, look at Donald... If he can't make money, how in the world can you expect any white male to make money?

If you aren't owing money and declaring bankruptcy every seven years as a white male, you are probably missing out.

Most people expect to live to 80, which is kind of unrealistic for certain demographics.

[suntan]

Originally posted by Xtrema


I don't think it's possible unless one has saved up RRSP allowance to be used later in the career.

If you are a lifer at one employer with decent pension plan, it's almost impossible to put into RRSP.

And I prefer RRSP which I have more control over than some employer plans especially ones that lock you money away in LIRA.

Depends, but my wife's previous DC has done extremely well (> 12% annualized return over the last ten years). Also the MER is only 0.38%.

[suntan]

Originally posted by Prail


Another point to this - I remember the conservatives just before getting punted were making a lot of noise about making changes to the 'unsustainable' pensions. They turned out to be funded just fine.

The problem is most conservatives I know are fairly uneducated about how these things work and just assume it's free money to lazy government workers. Many don't realise just how much money is funnelled into it as a payroll deduction... it's very sizeable.

So while I'm sure it will exist in some form - I'm just waiting for another conservative government to take a swing at them.

Most "conservatives". LOL.

Dumbo, the PSPP has a massive shortfall.

And please stop about the whining about the payroll deduction. Your chances of taking that same money and coming up with the same rate of return is impossible without taking on substantially more risk.

[blownz]

First off, I am very jealous of the DB government pension. I keep telling my wife to get a job with the government so we have a solid guaranteed base for retirement but she keeps working at a not for profit... lol


As for the pole, I am currently saving about 55%. However, my wife and I have no work matched RRSP plans so we have to do all the savings ourselves. We are also catching up for the early child years when my wife spent 4 years at home (then 2 more part-time) and I only managed to save around 10-15%. But since the mortgage was paid off 2 years ago we have been going hard to catch up the savings (Maxed TFSA, 3 years until RESP maxed, and 7 for RRSP, plus a substantial amount in unregistered savings). Still not being really frugal though, we do at least 1 out of country trip per year and drive newer vehicles (2016, 2014, 2014).

Not sure how long we can last saving this much, but I am hoping for a few more years to put us in a really comfortable position.

[HiTempguy1]

Originally posted by suntan
Most "conservatives". LOL.

Dumbo, the PSPP has a massive shortfall.

No it doesn't I even provided numbers. Typical Beyond, can't be bothered to read more than one sentence in a post

Originally posted by suntan

And please stop about the whining about the payroll deduction. Your chances of taking that same money and coming up with the same rate of return is impossible without taking on substantially more risk.

Er, no, not particularily. Its pretty easy over 30 years to average 8% return on investment in the stock market. Because that's basically what people have been doing forever.

Guess what my 30 year payout from the pension works out to if I retire at 55? The exact same amount I'd have sitting in investments if I took the money I pay in, matched it with employer matching, and averaged 8% returns over 30 years.

Shocking! In fact, its actually worse for those in the pension. Because at retirement, you have control of your millions, and can continue to keep them invested. Once I retire, that's it. My payout is my payout, I don't get to utilize my large retirement funds and continue to collect interest on the investments while retired.

Like I said, there is good and bad. But people who act like its some golden ticket miss the forest for the trees. It's a pretty swell deal if you look at it only as "a person retiring today gets X". Not so hot if you look at the risks involved over the next 30 years.

[suntan]

Originally posted by HiTempguy1


No it doesn't I even provided numbers. Typical Beyond, can't be bothered to read more than one sentence in a post



Er, no, not particularily. Its pretty easy over 30 years to average 8% return on investment in the stock market. Because that's basically what people have been doing forever.

Guess what my 30 year payout from the pension works out to if I retire at 55? The exact same amount I'd have sitting in investments if I took the money I pay in, matched it with employer matching, and averaged 8% returns over 30 years.

Shocking! In fact, its actually worse for those in the pension. Because at retirement, you have control of your millions, and can continue to keep them invested. Once I retire, that's it. My payout is my payout, I don't get to utilize my large retirement funds and continue to collect interest on the investments while retired.

Like I said, there is good and bad. But people who act like its some golden ticket miss the forest for the trees. It's a pretty swell deal if you look at it only as "a person retiring today gets X". Not so hot if you look at the risks involved over the next 30 years.

You didn't provide any "numbers", it was just a pile of useless crap.

The PSPP has a shortfall. It is currently being topped up. The gov't has 15 years to do that. I'm sure by year 5 there'll be yet another shortfall that needs to be made up.

You do not understand how your pension will work. Basically once you retire you will have an inflation-adjusted annuity forever until you are dead.

You said you will get $70K year @ age 55. Let's say you live until 80. You need $1.2 million by age 55. That draws the annuity down to zero by 80. So, would you have $1.2 million by age 55. Fuark I have $300K saved up, I'm 43 and there's no fucking way I can get to $1.2 million by the time I'm 55 without some wicked luck.

I love how you throw in that bit about "EMPLOYEE MATCHING". Most places don't employee match, or if they do it's only up to a certain puny amount. The PSPP still isn't close to 50:50 matching (the gov't - taxpayer - still provides most of the funding).

[Redlined_8000]

My number is right around EDIT: 35-40% on average straight into the bank.
Also have more entering my Sunlife RSP through work in which I contribute 6% per cheque and company contributes 9% per cheque for total of 15%.
Car's are paid off only debt is mortgage.
Gotta be frugal now in days. You never know what can happen. I just wana pay the house off first.

[HiTempguy1]

Originally posted by suntan
You didn't provide any "numbers", it was just a pile of useless crap.

I didn't realize the funding level of 84% at the end of 2014, and now the funding level of 89% only two years later is a pile of useless crap.

As for the rest of your post, clearly you fucked up in your retirement planning. Balled out of control a little too long and too hard while you were young eh? Were you putting $1400/month into retirement savings at the age of 22? Sure doesn't sound like it.

If you had put $1k/month away since 22, you'd be at close to $600k by now with an average return of 8%.

But it almost is like you yourself don't understand your own retirement plans.



I made some assumptions about you, and inputed it into one of the many handy retirement calculators out there. Seems like you will be fine if you are investing only $1k per month at the current savings of $300k you have?

Finally, most places DO employee match. Fuck, the trucking company my buddy works for does employee matching Most larger O&G places match 7-9%. So I don't know what the hell you are on about

[Sugarphreak]

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